Lottery fund decrease could hurt nonprofits

Deschutes County officials are warning that a drop-off in Oregon lottery revenue could mean $100,000 less over the next year for local nonprofits.

For 30 years, Oregon counties have received 2.5 percent of the state’s lottery proceeds, to fund a variety of programs.

The idea is for counties to support projects that help improve quality of life and boost the economy.

Deschutes County has received an average of $550,000 over the last five years from the lottery pool. But with fewer people gambling as the recession’s impacts have lingered, the revenue has started to drop.

In a memo to Deschutes County commissioners this week, county management analyst Judith Ure said commissioners would likely have to trim more than $92,000 from its lottery fund budget in the next fiscal year, compared with the current year. The new fiscal year starts July 1.

The county typically splits up its pot among more than a dozen nonprofit organizations, like Economic Development for Central Oregon, and social programs like the Bethlehem Inn, Central Oregon Veterans Outreach, Court Appointed Special Advocates and others.

But the state lottery fund “is not as robust as we might have hoped,” Ure told commissioners during a work session this week.

None of the numbers are set in stone at this point, and commissioners likely won’t have to decide on any cuts until they start putting the next fiscal year’s budget together in May.

But a 2014 revenue forecast, released by the state in February, warned that, “Video lottery sales have been weaker recently than they were during the worst of the recession.” Video lottery revenue make up 85 percent of the lottery funds that go to counties, so the decline is affecting everyone.

In January 2013, a federal payroll tax holiday expired, increasing the amount taken out of employee paychecks for Social Security.

The higher tax rates cut into employee incomes at a time when personal savings were already on the rise coming out of the recession, county Finance Director Wayne Lowry told commissioners.

In other words, Oregonians are spending less on nonessentials and in turn putting less into the state lottery fund.

“We’re starting to feel the effect of those things,” Lowry said Wednesday.

During the work session, commissioners looked at how the proposed cuts would affect local nonprofits.

Thirteen organizations received between $4,000 and $28,500 from the county lottery fund during the current fiscal year.

Commissioners could avoid any cuts by shifting money out of the county’s general fund. But they seemed hesitant to take that step Wednesday, though no firm decisions were made.

“The big picture is that we may need to take $5,000 or $10,000 out of certain places,” county Commissioner Tony DeBone said of the nonprofits’ expected funding amounts.